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Inv esting.com -- Air France-KLM’s shares surged over 16% in early trading on Thursday following its 2024 financial results, which exceeded market expectations.
The airline group reported full-year revenues of €31.5 billion, a 4.8% increase from the previous year, driven by a 3.6% rise in capacity and robust third-party maintenance revenues.
The operating result stood at €1.6 billion, with an operating margin of 5.1%. The fourth quarter saw an operating profit of €396 million, marking a €453 million year-over-year improvement, and an EBITDA of €1.0 billion, up €402 million.
Citi Research analysts highlighted that Air France-KLM’s full-year operating profit was "about 18% above consensus," primarily due to the strong performance of its Network Airlines business.
The company benefited from robust passenger demand, particularly in the North Atlantic market and premium cabins.
Additionally, a "much better peak season in Cargo versus last year," Citi said, boosted by strong demand from Asia, contributed to the positive results.
The group’s fourth-quarter fuel costs were lower than expected, totaling €1.54 billion compared to the anticipated €1.66 billion.
In the fourth quarter, Air France-KLM transported 23.5 million passengers, a 5.1% increase from the prior year. Capacity grew by 2.2%, while traffic rose 4.7%, elevating the passenger load factor by 2.1 percentage points to 87.4%.
Passenger unit revenue per available seat kilometer increased by 4.4% at constant currency, with strong pricing observed in North Atlantic routes and premium cabins.
Cargo operations also performed well, with the load factor improving by 3 points to 52.5% and unit revenue per available ton kilometer rising by 20.9% at constant currency.
The airline noted that e-commerce demand and disruptions in ocean shipping, particularly in the Red Sea, supported higher freight yields.
On the cost side, unit costs increased by 4% in the fourth quarter and 3.2% for the full year, reflecting salary hikes, airport charges, and investments in premium services.
However, lower fuel prices provided a partial offset. The company remains focused on cost control, with expectations that ex-fuel unit costs will increase in the low single digits compared to 2024, aligning with consensus projections.
Air France-KLM anticipates capacity growth of 4-5% in 2025 and has reaffirmed its medium-term targets for 2026-2028, which include achieving an operating margin above 8% and continued improvements in free cash flow.
Despite industry-wide challenges, including inflationary pressures and geopolitical uncertainties, Air France-KLM has maintained a steady recovery trajectory.
Strong demand in key markets, lower-than-expected fuel costs, and disciplined cost management position the airline for continued resilience in 2025.